DESIGN
Tile Talk!
FUNDING
Balance Your Investments with Portfolio Loans
Net-Zero Buildings Are Reshaping a Sustainable Future ONCE A FUTURISTIC IDEAL, CARBON-NEUTRAL BUILDINGS ARE NOW A PRESSING NECESSITY.
INVESTMENT STRATEGY
Defend Against Winter Damage
JAN-FEB 2025 $ 5 .95 US :: $ 6 .95 CAN JAN-FEB 2025 $ 5 .95 US :: $ 6 .95 CAN
PUBLISHER & CEO Eddie Wilson MANAGING EDITOR Carmen Fields
FULFILLMENT COORDINATOR Blair Pierce
DESIGNER Kat Hungerford
CONTRIBUTORS Luke Babich Lorraine Beato Stephanie Casper Merrill Chandler Dominion Financial Services Troy W. Eckard Gaylene Lonergan Taylor Miller Joel Moyes Real Property Management Damon Riehl Jeff Roth Jim Tannehill Michele Van Der Veen Skyler Wilson
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2 | think realty magazine :: january - february 2025
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Letter From The Editor
Embrace the Future of Real Estate Investing A s we enter 2025, the real estate landscape stands at the crossroads of innovation, sustainability, and resilience. The past few years have reshaped our understanding of property value, market dynamics, and investment strategies. Rising rates and inflation have had an impact on investing, but as with any real estate cycle, there is money to be made. Certainly, 2025 will be an interesting year given our current cycle. The economic backdrop of 2025 is both a challenge and an opportunity. Although interest rates have been high, they are showing signs of stabilizing, which could potentially increase buyer activity. Affordability is still a key concern, however. It will be an area to pay close attention to as policy changes with new stakeholders could create opportunities. One thing that can no longer be overlooked: Sustainability is not a luxury but a necessity. It is an area that may give investors an advantage over those who choose to ignore it. Energy-efficient buildings, for example, are becoming critical factors for long-term value. Technology is playing a key role in sustainability. The two go hand in hand. Investors who master it and incorporate it into their investing strategies will have a competitive advantage. For investors, technology and sustainability are key to securing long-term investments. 2025 will be a year to think long-term. Whether it’s integrating sustainable practices, leveraging cutting-edge technology, or diversifying your portfolio, real estate investors should plan to remain informed and innovative. As always, Think Realty is here to guide you through key trends
CARMEN FIELDS MANAGING EDITOR
with expert insights, in-depth analysis, and actionable strategies. Think Realty will be in Phoenix, a market that has remained strong, from March 27-28. We’ll be covering many of the factors to pay attention to in 2025, so join us there and stay up to date with pertinent investing insights. Get details at thinkrealty.com.
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Inside This Issue
C O N T E N T S
DESIGN Tile Talk!
OPERATIONS Defend Against Winter Damage Winterizing your rental property pays for itself in tenant safety and prevents costly repairs. Real Property Management PAGE 34 Flip the Script on Sustainability
FEATURE PAGE 26 Net-Zero Buildings Are Reshaping a Sustainable Future ONCE A FUTURISTIC IDEAL, CARBON-NEUTRAL BUILDINGS ARE NOW A PRESSING NECESSITY.
The right tile style and color transform any space, seamlessly blending interior design with the architectural essence of your home. Michele Van Der Veen PAGE 8 Sustainable Interiors Shape 2025 Design Trends Biodegradable materials, smart energy systems, and air-purifying plants are the cornerstone of modern design. Lorraine Beato PAGE 12 FUNDING Improve Your Balance Sheet With Portfolio Financing Portfolio loans offer a streamlined solution to simplify payments, boost cash flow, and scale your rental property holdings. Stephanie Casper PAGE 16 Economic Trends Shape Investment Property Loan Rates Inflation, interest rates, and monetary policies shape the cost of borrowing—here’s how to stay ahead in a competitive market. Damon Riehl PAGE 18 Flip More, Risk Less with 100% LTC Financing Scale your real estate portfolio faster with no- cash-in fix-and-flip loans. Dominion Financial Services PAGE 20 Why “Authorized Users” Are Rarely Worth the Risk This credit tool is best saved for a few case- specific scenarios. Merrill Chandler PAGE 22 INVESTMENT STRATEGY Dig Deeper: Unearth the Wealth of Mineral Rights Mineral rights offer a stake in valuable natural resources, with financial upside, control, and the chance to build a lasting legacy. Troy W. Eckard PAGE 32
Eco-friendly is not enough: a look at housing sustainability to set the stage for affordable homes. Jeff Roth PAGE 36
TAYLOR MILLER
Is It Wise to Use a Quitclaim Deed? The right deed safeguards all parties and prevents future legal headaches. Gaylene Lonergan PAGE 38 Build a Sustainable Edge with a Business Operating System Align sustainability with your operating system to create measurable results, reduce costs, and help future-proof your investment portfolio. Jim Tannehill PAGE 40 Build Green, Grow Wealth Sustainability in real estate isn’t just good for the planet—it’s a smart strategy for boosting property values and meeting market demands. Potential deregulation, changing tax incentives, and tariffs put a question mark on whether it’s better to plow ahead or wait for the dust to settle. Luke Babich PAGE 46 The Anti-Guide to Marketing Here’s how to lose friends and de-influence people like a pro! Skyler Wilson PAGE 48 Joel Moyes PAGE 44 Is Now the Time to Embrace Sustainability?
PAGE 8
PAGE 16
PAGE 34
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Design
Key decisions like selecting the material and size must come before considering color or finish.”
W ith the growing variety of tile options available, choosing the right one for your next project can feel overwhelming. Key decisions like selecting the material and size must come before considering color or finish. Since tiles are often used in high-traffic areas, it’s important to evaluate maintenance requirements and suitability for stain-prone spaces like kitchens and bathrooms. Additionally, measuring the area ensures you select the proper shape, pattern, and color. Considering these factors in advance will streamline your tile selection process and make designing your space much simpler. HISTORY OF TILE Understanding the history of tile helps us to better understand it and its intended use. Tile is believed to have originated around 1000 B.C. in China and Egypt. It was designed to be decorative and to have a practical purpose. During this period, tile was made from sand, clay, and even rocks, but the tiles were not glazed. When glazing (enamel coating) came along in the ninth century, it was a game changer, increasing tile’s popularity and demand because glazing made tile “water impermeable.” By the 18th century, machines that pressed dry clay together made tile more accessible and even more popular. In 1870, the U. S. started producing its own tiles. By the early 1900s, tile was becoming so popular that during the building of the New York Subway, tile was used as a design element, giving birth to the ever-popular “subway tile.”
aesthetic and functional qualities to suit different design needs. GLASS. Glass tiles are ideal for bathrooms and kitchens. They offer a clean and sleek design that works especially well in modern spaces. Their reflective surface enhances the contemporary feel, making them a staple in creating a polished, minimalist look. MOSAIC. Made from small pieces of glass, metal, stone, porcelain, marble, or travertine, mosaic tiles add intricate detail and visual interest. They are an excellent choice for vintage-inspired designs, such as modern farmhouse interiors. TRAVERTINE. A hallmark of Tuscan- style design, travertine is a limestone tile. With its rustic charm and natural shades of rust, brown, and tan, they bring warmth to any space. CERAMIC. Crafted from a combination of clay, minerals, and water, ceramic tiles are fired in a kiln for durability. They are available in a multitude of shapes and sizes, making them one of the most versatile options on the market. CEMENT. Created from a combination of water, sand, and cement, these tiles are similar to ceramic tiles in function but offer a more robust look. This tile works great in modern, industrial, and even rustic designs. MARBLE. This tile is a natural stone that features unique natural veining. It is ideal for bathroom and kitchen backsplashes. With its sophisticated and classy look, this tile will help tie any traditional design together. SPACE REQUIREMENTS When selecting tiles for a specific room, it’s essential to consider the
Tile Talk! THE RIGHT TILE STYLE AND COLOR TRANSFORM ANY SPACE, SEAMLESSLY BLENDING INTERIOR DESIGN WITH THE ARCHITECTURAL ESSENCE OF YOUR HOME.
MATERIAL Tiles come in various styles and materials, each offering unique
MICHELE VAN DER VEEN
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MICHELE VAN DER VEEN
atmosphere. In contrast, lighter colors like white and beige are perfect for smaller rooms because they reflect light and create an airy, more expansive feel. SHAPE, SIZE, AND PATTERN Sizing up the space to be tiled is also an important part of the step toward creating an aesthetically pleasing home. Not every shape, size, or pattern is made to work in every room. Again, knowing the background and origin of the home helps with your selection of patterns. Choosing a tile that is relevant to the size of the room is always a good starting point. A large room such as a kitchen or living room can handle larger- sized tiles, but medium-sized rooms like bathrooms need medium tiles. Mosaic tiles, which are very popular in modern farmhouses, work great in small spaces. Tiles come in a variety of shapes these days, adding varying levels of visual interest to a home and defining the personality and character of the rooms
in which it is used. Selecting the right one can be very confusing. Square tiles and hexagon tiles are a big look for 2024. Both work well in traditional and modern homes. The shape of your tile will impact the overall feeling of a room, influencing the perception of the room’s size and mood. Selecting the right tile for your next investment property can be achieved easily by understanding the architectural design of the home, its history, and the practical needs of each room to be tiled. Considering factors like how a room will be used, its shape and size, and which patterns, and colors would work will before hitting the stores will give you some direction and make you feel more in control. With hundreds of tiles to choose from, selecting the right tile for the right room will feel less stressful if you do your homework before you arrive at the tile stores. Buying tile with confidence will aid you in your design process and help you to create beauty and value for any project.
space’s unique requirements. Kitchens, bathrooms, laundry rooms, and even mudrooms often experience high moisture and require water-resistant, easy-to-clean tiles. Porcelain tiles are an excellent choice because they are less porous, making them highly resistant to water and stains. Ceramic tiles are also water and heat-resistant but are more prone to moisture-related damage over time compared to porcelain. Natural stone tiles, while durable and scratch-resistant, are the most porous and require regular sealing to prevent staining and discoloration. Though they demand more maintenance, including frequent cleaning and sealing, their longevity and timeless appeal make them a popular choice for spaces where durability is key. STYLE AND COLOR Choosing the perfect style and color of tile plays a crucial role in defining a home’s architectural design. Whether your project is a new build or renovation, tile work is where the home starts to come to life.
Thoughtful tile selection bridges the interior design with the exterior architecture, creating a cohesive look from the outside in. To achieve cohesiveness, understanding the history and background of the home’s design is essential. For example, travertine is the top tile choice for a Tuscany-style home because it mimics the limestone and sandstone found in Tuscan quarries. Pairing natural stone with matte tiles instead of glossy finishes adds an authentic Tuscan flair to the design. Tile color also depends on the style of the home and regional influences. For example, earth tones such as rusts, browns, and creams are common in Tuscan homes because of the natural materials available in that region of the world. When selecting tile for specific spaces, consider how color impacts the room’s feel. Darker tiles such as charcoal or walnut are more suitable for larger spaces because these darker colors absorb light, creating a cozier and more intimate
Michele Van Der Veen is the host of Good Day segments, including Flip It, Decorate Like a Designer, and Stage to Sell. She started her career in real estate investing more than 30 years ago. A published author, Van Der Veen has been recognized and featured in international magazines for her unique approach to interior design. Acquiring a formal education from the Interior Designers Institute of California, her experience stems from building custom homes to flipping more than 100 homes and working in commercial real estate development alongside her father at a young age. Not afraid to push the limit on her designs and investments, Van Der Veen will often be heard reassuring her team about her decisions by saying “Don’t worry, we are the comps!”
For more on Van Der Veen’s work or to contact her, visit iHeartHomescorp.com.
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Design
ENERGY-EFFICIENT LIGHTING AND SMART CONTROLS
manufacturers are starting to move toward non-toxic dyes and finishes to minimize indoor air pollution and support a healthier home environment. Innovations in sustainable engineering have led to materials like mycelium- based leather (an eco-friendly leather alternative derived from mushrooms) and recycled glass countertops. These materials combine aesthetics with functionality, offering sustainable alternatives to conventional resources.
areas, turning off lights when not in use and helping lower electricity bills.
WATER CONSERVATION INNOVATIONS Water conservation is a growing concern. Homes in 2025 will include a variety of water-saving features and smart plumbing fixtures to address this issue. In addition to low-flow faucets, showerheads, and toilets, home interiors will incorporate technologies that optimize water use. Greywater systems, which collect wastewater from sinks, showers, and washing machines, are expected to become more popular in residential settings. This water can be filtered and reused for irrigation or toilet flushing, significantly reducing household water consumption. Smart faucets that monitor water use and adjust flow based on needs will become commonplace. These systems use sensors to detect motion or set water limits, making it easier to conserve water in kitchens and bathrooms. Also, leak detection systems will notify homeowners of any plumbing issues helping to prevent water waste and potential damage. INDOOR AIR QUALITY (IAQ) IMPROVEMENTS Healthy indoor air is crucial for sustainability in home interiors because poor air quality can harm both the environment and people. In 2025, homes will incorporate several design features to promote cleaner, healthier indoor air quality. Indoor plants that are effective at filtering toxins from the air, such as
Lighting can have a major impact on both energy use and the mood of a space. By 2025, the focus on sustainable lighting will see homeowners gravitate toward
energy-efficient LED systems, smart lighting controls, as well as lighting that maximizes natural sunlight. LED lighting has already become a standard for energy efficiency, but in 2025, more interiors will embrace OLED technology. OLED lights offer a softer, more natural lighting experience with less energy consumption. Unlike conventional lighting, this lighting uses organic compounds that emit light when an electric current is applied, making these lights eco-friendly and more flexible for custom designs. Homes in 2025 will increasingly be designed to optimize natural daylight, reducing the need for artificial lighting during the day. Automated blinds and shades, controlled via smart home systems, can adjust based on sunlight intensity to maintain ideal lighting and temperature levels indoors. Not only does this conserve energy, but it also provides homeowners with a natural, dynamic light that enhances mood and well-being. Integrated with voice controls and smartphone apps, smart lighting systems allow homeowners to control lighting intensity, color temperature, and even lighting schedules thereby reducing unnecessary energy consumption. Motion-activated lighting will become a standard feature in bathrooms, closets, and other main
CIRCULAR DESIGN AND MODULARITY
Sustainable Interiors Shape 2025 Design Trends BIODEGRADABLE MATERIALS, SMART ENERGY SYSTEMS, AND AIR-PURIFYING PLANTS ARE THE CORNERSTONE OF MODERN DESIGN.
The future of sustainable interiors also includes designs that adhere to circular economy principles that aim to extend the lifecycle of products and minimize waste through reuse, recycling, and upcycling. This has led to a trend toward modular and flexible furniture that adapts to the changing needs of homeowners, making rooms multifunctional without needing more “stuff.” Modular furniture allows for flexible configurations, which is great in compact urban and tiny homes. Pieces can be reassembled, resized, or repurposed as needs change, reducing demand for additional items and extending the furniture’s lifecycle. Leading brands are developing repair and reupholstery programs to encourage customers to renew, rather than replace, furniture. In 2025, more designers and retailers are likely to prioritize products with repairable and replaceable components, which can extend their life span and reduce waste.
LORRAINE BEATO
A s the world’s focus on climate change and environmental consciousness grows stronger, sustainability in interior design is evolving rapidly. By 2025, sustainability will be fundamental to how people shape their living spaces. Home interiors are being reimagined with eco-friendly materials, energy- efficient appliances, and technologies prioritizing sustainability and comfort. As we look to the near future, here are some sustainable design features set to transform interiors.
ECO-FRIENDLY MATERIALS A key trend shaping the future of sustainable interior design is the use of eco-friendly materials. In 2025, one can expect interiors to incorporate more reclaimed, renewable, and biodegradable resources, significantly reducing environmental impact while bringing a natural aesthetic indoors. Using reclaimed wood and recycled metals will be more common in furniture, cabinetry, and flooring. Reclaimed wood adds warmth and character to interiors, with each
piece telling its own story through its unique grain and finishes. Recycled metals offer a more modern, industrial look that pairs well with minimalist or contemporary designs. There will be an increase in biodegradable materials for furniture, textiles, and wall coverings. This includes options like cork, bamboo, and natural fibers such as organic cotton, linen, and wool. These materials break down naturally at the end of their lifecycle, reducing waste and environmental impact. Also,
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LORRAINE BEATO
consumption in real time. These systems provide insights into peak energy usage times and suggest ways to reduce consumption, such as running appliances during off-peak hours. Advanced home automation systems and apps will allow homeowners to control lighting, heating, cooling, and even water use through a single platform. These centralized apps will help prevent energy waste by automating daily actions such as turning off the lights or lowering the thermostat when the home is empty. 2025 promises a range of innovative, sustainable design features that will transform the way we live in our interiors. From eco-friendly materials and modular furniture to energy- efficient lighting, smart technology, and air quality enhancements, sustainability will be at the center of interior design. These features not only reduce environmental impact but also create healthier, more comfortable, and more livable spaces. For homeowners and designers alike, the sustainable home of 2025 represents a compelling vision of harmony among style, functionality, and environmental responsibility.
spider plants, peace lilies, and ferns, will become popular as natural air purifiers. Additionally, biofilter systems, which use plant-based technology to filter and purify air, will find a place in more interiors, contributing to a healthier home environment without the need for artificial air filters. VOC-free (volatile organic compound) paints and coatings will be a standard feature of sustainable interiors in 2025. These products do not release harmful chemicals into the air, providing a safer environment for residents while reducing the emission of pollutants that contribute to air pollution. SMART HOME INTEGRATION The role of smart technology in sustainability cannot be emphasized enough. In 2025, smart home systems will enable real-time energy and resource management, helping homeowners reduce their carbon footprint and effortlessly optimize resources. Smart meters and energy management platforms will help homeowners monitor and control their energy
ARE YOU TRYING TO REACH REAL ESTATE INVESTORS? Try advertising with us. Digital • Print • Newsletter • Webinar • Podcast
Lorraine Beato is the CEO of Atlanta’s Residences powered by eXp Realty. She is the author of “Flip the Switch,” a practical guide for real estate agents and professionals ready to take their experience in real estate to the next level. Beato has been a full-time, successful real estate agent and investor for more than 25 years and specializes in thinking outside the box to get clients to the closing table fast. Combined with her personal experience in MBS trading with Merrill Lynch and building her own retirement portfolio using creative strategies to acquire properties and improve their cashflow, Beato’s ability to negotiate and navigate her clients’ way to winning investments has made her a favorite with investors nationwide who trust her to acquire, improve, list, and sell their properties when they are not able to personally manage projects in the Atlanta area.
CALL, TEXT, EMAIL TODAY. (816) 398-4130 • sales@thinkrealty.com
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Funding
to financing multiple properties at once: one loan, one servicer, and one low monthly payment for a handful of properties. The benefits of this kind of financing include: LOWER INTEREST RATE. Depending on the portfolio size, a rental portfolio loan can offer a meaningful reduction in interest compared to single-asset DSCR rental financing. In some circumstances, investors benefit from as much as half of a percentage in interest rate reduction! Even with just a 0.25% reduction, an investor could save over $10,000 over five years and $20,000 over 10 years. STREAMLINING FINANCES. Managing multiple loans for different properties can be complicated—and expensive. By consolidating multiple rental property loans into a single loan, investors can streamline their balance sheet, saving time and potentially lowering administrative costs. MORE FLEXIBLE TERMS. Portfolio loans can allow for variations in DSCR ratios, property types, credit profiles, and income streams. This flexibility is crucial in cases where properties may not meet conventional loan requirements. This can also lead to more customized loan terms that align with your unique needs, potentially offering better rates or terms. INCREASED CASH FLOW. Consolidation through a portfolio loan might allow for a restructured repayment plan, potentially improving cash flow by extending the repayment term or adjusting payment schedules.
Rental portfolio financing offers many benefits, including customized terms, increased cash flow, and consolidated interest rates. ”
LEVERAGE PORTFOLIO LOANS FOR GROWTH When you’ve acquired five or more rental properties, it’s an
real estate investment portfolio. Be sure to consider all of your available financing options and consult an expert to select the best strategy for your real estate needs.
SPONSORED CONTENT Improve Your Balance Sheet With Portfolio Financing PORTFOLIO LOANS OFFER A STREAMLINED SOLUTION TO SIMPLIFY PAYMENTS, BOOST CASH FLOW, AND SCALE YOUR RENTAL PROPERTY HOLDINGS.
opportune moment to transition your thinking from individual units to a comprehensive investment property portfolio. This shift isn’t just a change in perspective—it’s a strategic move that can lead to tangible benefits. Rental portfolio loans like the ones offered by Kiavi are structured to bring peace of mind, cost savings through economies of scale, operational efficiencies with a single payment system, and flexible loan options to accommodate diverse investment strategies. Rental portfolio financing offers many benefits, including customized terms, increased cash flow, and consolidated interest rates. They can also add diversification and balance to your
STEPHANIE CASPER
STEPHANIE CASPER
F or real estate investors struggling to juggle an intricate web of payments, terms/interest rates, and financial management that comes with financing multiple rental properties, it may be time to consider the strategic move of consolidating into a rental portfolio loan. This financing option offers
Stephanie Casper is chief revenue officer at Kiavi, one of the nation’s largest private lenders to residential real estate investors with more than $23.5 billion in funded loans. Kiavi harnesses the power of data and technology to offer real estate investors a simpler, more reliable, and faster way to access the capital they need to scale their businesses.
a savvy solution for investors looking to simplify their finances, improve cash flow, and manage their properties more efficiently. AN ALL-IN-ONE FINANCING SOLUTION Maintaining a balanced and diversified rental property portfolio is key to
long-term success and financial stability in the real estate investing space. Real estate investors scaling their rental portfolios often face the challenge of managing multiple loans, each with its own set of terms and conditions. This is where portfolio loans can play a transformative role, providing a streamlined approach
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Funding
interest rates tend to rise, making borrowing more expensive. Conversely, during economic downturns, interest rates typically fall to stimulate spending. Investors should track these trends and consider how future changes might affect their investments, whether they are looking into multifamily housing or office real estate investments. GDP Gross domestic product (GDP) growth reflects the overall health of an economy. Strong GDP growth can lead to higher loan rates as demand for credit increases. However, a robust economy also presents opportunities for property value appreciation. Investors in single-family housing or retail properties can benefit
Investors should stay informed about these policies as they directly affect borrowing costs for investment properties, including retail and office real estate. HOUSING MARKET REGULATIONS Government regulations in the housing market, such as tax incentives or restrictions, can affect loan rates and the availability of financing. Favorable regulations can make financing more accessible, while stringent regulations might limit borrowing options. Investors should pay attention to regulatory changes that might affect their ability to secure loans for single-family homes or other types of properties. INTERNATIONAL TRADE Global trade dynamics influence local economies and, consequently, loan rates. Trade agreements or disputes can impact economic stability and interest rates. For instance, a trade dispute might lead to economic uncertainty, causing interest rates to rise. Investors in mixed-use and office real estate should be aware of these global factors as they plan their investments. GLOBAL FINANCIAL MARKETS Global financial markets are interconnected. Economic trends in major economies like the U.S. or European Union can influence loan rates worldwide. Understanding global market trends helps investors anticipate changes in loan rates and make informed decisions. For those investing in multifamily properties, staying updated on global financial movements is essential for strategic planning. Economic trends significantly impact investment property loan rates. By
understanding these factors, investors can better navigate the market and make strategic decisions. Whether investing in single-family homes, multifamily
units, or commercial properties, staying informed about economic indicators is crucial for success.
DAMON RIEHL
Damon Riehl is the founder and CEO of Investment Property Loan Exchange. He has more than 35 years of lending experience in various asset classes, including commercial and residential mortgage, and small business construction lending. Riehl held top leadership positions as head of commercial lending for Ocwen Mortgage, head of unsecured lending for Citibank, global mortgage leader for GE Capital, and head of construction products at Fannie Mae. He is a member of the Harvard Joint Centers for Housing Studies. Riehl has built six de novo lending platforms and used that knowledge to build and grow Investment Property Loan Exchange and the fintech platform LoanBidz.com. Now that you understand the benefits and considerations you need to take when investing in real estate, you may want to start investing in your first property. One of the first steps is to work out a budget and your financing options. Our team at LoanBidz.com can help you figure out affordable options from the most reliable lenders for your exact needs.
from this by securing loans during times of stable economic growth.
Economic Trends Shape Investment Property Loan Rates
EMPLOYMENT RATES AND BORROWING
Employment rates directly influence consumers’ ability to borrow. Higher employment rates generally lead to higher consumer confidence and increased borrowing. When employment rates are high, lenders are more likely to offer favorable loan terms. This is particularly important for investors in multifamily and mixed-use properties, where tenant occupancy rates are closely tied to employment levels. MONETARY POLICIES Central banks use monetary policies to manage economic stability. Policies like quantitative easing or tightening can significantly impact loan rates. Quantitative easing, for example, involves central banks buying securities to increase the money supply and encourage lending.
INFLATION, INTEREST RATES, AND MONETARY POLICIES SHAPE THE COST OF BORROWING—HERE’S HOW TO STAY AHEAD IN A COMPETITIVE MARKET.
DAMON RIEHL
I nvestment property loan rates are influenced by myriad economic factors. Understanding these factors can help investors make informed decisions and maximize their returns. This article will delve into the key economic trends that
INFLATION Inflation erodes the purchasing power of money, leading central banks to adjust interest rates to control economic growth. When inflation rises, central banks may increase interest rates to curb spending. This, in turn, affects loan rates for investment properties. Investors must be aware of inflation trends and
consider how rising rates can affect their financing costs. For those investing in mixed-use properties, it’s crucial to lock in rates before significant hikes.
INTEREST RATES Interest rates are a primary factor
impact loan rates and provide practical advice for investors.
influencing loan rates. Historical trends show that when the economy is booming,
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Funding
IF YOU HAVE
ONE OF THESE AND
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DOMINION FINANCIAL SERVICES
F ix-and-flip investments can be highly profitable, but they often require significant upfront capital. Loan-to-Cost (LTC) financing at 100% can make a huge difference by allowing investors to maximize their capital and scale their businesses. LTC represents the percentage of a project’s total cost that a lender will cover. With 100% LTC financing, the lender funds both the purchase price and the renovation costs, so you don’t need to invest any of your own money. This game-changing option frees up your capital, allowing you to take on more projects or pursue larger deals. KEY BENEFITS There are several benefits to 100% LTC financing. Among them are the following: PRESERVE CASH. LTC financing at 100% keeps your cash available for other opportunities, boosting liquidity and helping you expand your portfolio. SCALE FASTER. Spread your capital across multiple projects, diversifying risk and maintaining profit potential even if one project faces challenges.
BOOST ROI. With minimal cash investment, your ROI grows as you leverage the lender’s funds to amplify profits. MINIMIZE RISK. Not needing to use personal funds reduces your risk, making it easier to explore new markets without tying up cash.
Dominion Financial Services LLC. NMLS ID # 898795, 32 South St Baltimore MD 21202. Dominion Financial Services LLC. NMLS ID # 898795, 1029 N Calvert St Baltimore MD 21202. Dominion Financial Services, LLC is licensed or exempt from licensing in all states, except Nevada. Dominion Financial Services, LLC is licensed in Minnesota as a Mortgage Originator (License No. MN-MO-898795). Dominion Financial Services, LLC is licensed in Arizona as a Mortgage Banker (License No. 0950308). Dominion Financial Services, LLC is licensed as a California Finance Lender and Broker under Department of Business Oversight (License No. 60DBO 91679). Dominion Financial Services, LLC is licensed in South Dakota as a Mortgage Lender (License No. ML-05220). Dominion Financial Services, LLC is licensed in North Dakota as a Money Broker (License No. MB103364).Dominion Financial Services, LLC is licensed in Vermont as a Commercial Lender (License No. 898795 CLL). Dominion Financial Services, LLC is licensed in Oregon as a Mortgage Lender (License No. ML-5763). Dominion Financial Services, LLC is licensed in Idaho as a Mortgage Broker/ Lender (License No. MBL-2080898795). Dominion Financial Services, LLC is licensed in Colorado as a Mortgage Company.Dominion Financial Services, LLC is licensed in the District of Columbia as a Mortgage Dual Authority (License No MLB898795) Dominion Financial Services, LLC is licensed in Florida as a Mortgage Lender (License No. MLD1796). Dominion Financial Services, LLC is licensed in Pennsylvania as a Mortgage Lender (License No. 104295). Dominion Financial Services, LLC is licensed in Texas as a SML Mortgage Company.
THEN YOU HAVE
QUALIFYING To qualify for 100% LTC financing, you’ll need to meet certain criteria. Lenders typically seek investors with a proven track record in fix-and-flip projects. A solid business plan, accurate cost estimates, and a clear exit strategy can greatly improve your chances of approval. By leveraging 100% LTC financing, you can scale your operations without using your capital, enabling you to close more deals, accelerate growth, increase ROI, and minimize financial risk. Ready to scale your fix-and-flip business? Dominion Financial offers 100% LTC financing with no appraisals and 48-hour closings. Get pre- approved with Dominion Financial today by calling (410) 883-8493.
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20 | think realty magazine :: january - february 2025
Funding
Why “Authorized Users” Are Rarely Worth the Risk THIS CREDIT TOOL IS BEST SAVED FOR A FEW CASE-SPECIFIC SCENARIOS.
Many people believe that being an authorized user will improve their credit score, but that’s not always true.”
MERRILL CHANDLER
M ost people don’t realize how harmful it can be to add someone as an authorized user to your account. Likewise, becoming an authorized user on someone else’s account might not help your credit score or future loan approvals. In fact, it could hurt you in the long run. Understanding how being an authorized user can affect your credit is important, because your actions as well as how you manage others’ accounts can have negative consequences. Let’s take a look at how authorized users work, whether you should trust the people involved in the process, and the risks of
But even the people closest to you can put you at risk. Before you add someone as an authorized user, make sure they keep a low balance on their card (a high balance can hurt your credit) and that they pay their other bills on time. If they miss a payment on one of their other accounts, it can negatively impact the account to which you’ve added that user. Imagine if a child made a mistake on your account— they might keep it secret until they realize the damage it caused to your credit. Here’s a story to illustrate this point: A company was helping a client who wanted to qualify for a Chase credit card. The client worked hard to improve his credit and after a lot of effort, he was
becoming or adding an authorized user. It’s better to avoid it altogether than to do it incorrectly because the dangers can be serious for everyone involved. HOW AUTHORIZED USERS WORK An authorized user (AU) is someone allowed to use a credit card, even though they are not the primary account holder or responsible for the payments. You can either add an authorized user to your account, or you can be added as an authorized user to someone else’s account. It’s important not to confuse authorized users with joint account holders, where
whether you’ll be approved. Lenders don’t approve high-value loans like credit cards, car loans, or mortgages just because you have a good score. Instead, they look at your borrowing habits, which are reflected in your credit profile. Although your score might rise a little, it won’t necessarily make you more “fundable” (qualified for loans). PERSONAL VS. BUSINESS ACCOUNTS You can have authorized users on both personal and business accounts, but the risks are high when you allow someone to be an authorized user on your personal account. On the other
hand, authorized users for business accounts have different rules, and business partners are often authorized users on corporate accounts. TRUSTING THE PEOPLE AROUND YOU Whether you’re dealing with personal or business accounts, it’s essential to trust everyone involved with your credit accounts. A parent who makes their college-age child an authorized user on a credit card for use in an emergency may be one of the few situations where adding someone as an authorized user might be acceptable.
both people are responsible for paying the bills. An authorized user is able to make purchases but is not responsible for paying the balance (although they are allowed to—credit companies will take bill payments from anyone). Many people believe that being an authorized user will improve their credit score, but that’s not always true. With newer versions of FICO software, an authorized user might see a small boost in their score, but in the long run, credit score is less important than most people think. Your credit score mainly affects the interest rate and terms of loans, not
22 | think realty magazine :: january - february 2025
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approved. He was thrilled. However, things took a turn when he shared his success with a friend. He added his friend as an authorized user on the new Chase card. Unfortunately, the friend had poor credit. Within a month, the account was shut down because the friend’s credit history was a problem. This caused the client to lose the credit card he had worked so hard for. If he had consulted with someone knowledgeable before adding his friend, he could have been warned about the risks. This story shows that even good friends and family can cause problems if you trust them with your account. Your credit is constantly monitored by underwriting software, which tracks all authorized users, so their actions can directly affect your credit. Be careful about who you trust with your accounts because it can harm your ability to get loans or credit in the future.
authorized user will be negatively affected. The software doesn’t distinguish who made the payments or charges; it just sees both people as equally responsible for the account. That being said, even if the authorized user is the individual making the payments, the account owner is the only one who would receive the credit. Because of this, being an authorized user is high risk and low reward. If you’re the primary account holder and you know you’ll be late on a payment, remove the authorized user from the account to protect them from the consequences.
Instead of relying on trade lines or becoming an authorized user, focus on improving your credit profile through responsible borrowing and timely payments. It may seem selfish, but protecting your credit is more important than trying to help someone else with theirs. Being careful now can help you avoid major problems later.
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MERRILL CHANDLER
AVOIDING FRAUDULENT “TRADE LINES”
Merrill Chandler, a personal and business credit pioneer and co- founder of Lexington Credit Repair Law Firm, became dissatisfied more than 30 years ago with the ineffective results of credit repair. He discovered that getting approved for personal or business credit did not rely on a credit score but, in fact, was the result of having “fundable” borrower behaviors. With the right strategies, a borrower can “optimize” their financial behaviors
It’s also risky to purchase a trade line—a practice where businesses sell access to “clean” credit accounts to people looking to improve their scores. These businesses don’t tell their customers that the trade lines belong to strangers. If you don’t know the person behind the account, how can you trust them? This is one of the many risks involved in being an authorized user. PROTECTING YOUR CREDIT When it comes to authorized users, there are many risks you should consider. Although it might seem like a good way to help someone or boost your credit, it can harm you in the long run. Always be cautious about who you trust with your accounts and remember that the benefits of being an authorized user are minimal compared to the potential negative consequences.
THE RISKS OF BEING AN AUTHORIZED USER
Being an authorized user carries a lot of risks, with very few rewards. FICO doesn’t give much weight to authorized users: only around 40% of the points the primary account holder gets. This means the authorized user only gets a small boost, but if the account goes into delinquency or is charged off, the negative impact affects both the primary cardholder and the authorized user equally. If the account is late, goes into collections, or gets charged off, both the primary account holder and the
to become highly fundable, increasing the frequency and
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amount of their credit approvals. He co-founded Get Fundable! to help real estate and business entrepreneurs nationwide grow their businesses the way they want, resulting in his students and clients becoming more fundable and getting more than $250 million in funding. If you want to learn more, check out www.getfundable.com.
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FEATURE
Investment Strategy
T he term “net-zero building” is relatively new. The idea behind it dates back to the 1970s, however, when scientists began discussing the possibility of “zero-energy buildings.” The rebranded net-zero terminology is defined as a building that produces as much or more energy than it consumes in a year. Fifty years ago, this idea might have conjured images of futuristic architecture or niche environmental projects. Today, it is a necessity born of environmental urgency, economic pragmatism, and shifting societal expectations. As the impacts of climate change become more apparent and energy costs continue to rise, the transition to net zero is becoming a necessity rather than a moral preference. By addressing carbon emissions, fostering economic efficiency, and meeting regulatory and social demands, net-zero buildings are becoming a cornerstone of responsible real estate development. The importance of net-zero buildings begins with the planet’s pressing environmental challenges. The construction and operation of buildings contribute approximately 40% of global carbon emissions, a staggering statistic that underscores the importance of decarbonizing the built environment. These emissions stem from energy consumption during construction, heating, cooling, and lighting, making buildings a critical target for climate action. Transitioning to net-zero operations, where structures produce as much energy as they consume, directly mitigates their environmental footprint. This shift is not just an ethical choice but a practical one, aligning with international climate agreements and commitments to limit global warming. Net-zero buildings serve as a beacon of what is possible, demonstrating that sustainable practices can be implemented without sacrificing functionality or comfort.
ECONOMIC ADVANTAGES Economics also plays a decisive role in the rising adoption of net-zero buildings. Rising energy costs are straining budgets, prompting developers and property owners to seek innovative solutions to reduce operational expenses. While the upfront costs of designing and constructing net-zero buildings can be higher than traditional buildings, the long-term savings are undeniable. Energy-efficient systems, renewable power generation, and optimized resource use drastically cut utility bills, creating financial incentives for developers and occupants alike. Additionally, green financing options such as loans with favorable terms for sustainable projects have emerged as powerful tools to support net-zero building adoption. As economic pressures grow, these buildings represent a smart investment in both environmental stewardship and financial stability. PUBLIC POLICY Evolving regulatory landscapes also propel the shift toward net-zero buildings. Governments worldwide are implementing stricter building codes and energy efficiency standards to combat climate change and reduce reliance on nonrenewable resources. In many regions, developers must meet net-zero or near-net-zero energy benchmarks for certain types of buildings. Policies offering tax credits, grants, and other incentives further encourage the construction of net-zero buildings, making them necessary for compliance and a strategic advantage in competitive markets. These measures reflect a broader recognition that sustainable building practices must be integrated into public policy to drive widespread change.
Net-Zero Buildings Are Reshaping a Sustainable Future ONCE A FUTURISTIC IDEAL, CARBON-NEUTRAL BUILDINGS ARE NOW A PRESSING NECESSITY.
TAYLOR MILLER
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